CONSULTING PROPOSAL

CONSULTING PROPOSAL

TEAM SHARKS
A K S H AT G U P TA
VEDANT SOMANI
AY U S H M A D H O G A R H I A
 How Exactly does Zomato Earn Money ?
The company has been successful in diversifying its service portfolio and revenue streams

FOOD DELIVERY ADVERTISING

➢ 14.7 Million AMT Customers in FY22 116%

➢ 180 K active restaurant partners in FY22 85%

➢ 535 Million orders delivered in FY22 124%

➢ 1000+ active food delivery cities in India 119%

HYPERPURE DINE-OUT & other

➢ 10 Cities & 20 warehouses across India 75% ➢ 15% Drop in revenues in FY22 due to Covid
➢ 51K Unique restaurant customer base 100% ➢ INR 200 Mn Loss in FY 22. 600Mn in FY 21

WHITELABEL ZOMATO KITCHENS

➢ Restaurants can develop customized food ➢ 180 Operational Kitchens through which
delivery apps to connect and engage with Zomato provides kitchen infrastructure
customers services to select restaurant operators

BUSINESS MODEL GROWTH AREAS SUGGESTIONS BLINK-IT DEAL FUTURE PROSPECTS 1

 Analyzing the Business Model – BCG & Ansoff matrix
RELATIVE MARKET SHARE
EXISTING PRODUCTS NEW PRODUCTS
STARS QUESTION MARK

EXISTING MARKET
CLOUD KITCHENS HYPERPURE

Existing Market Existing Market

Food Service Industry Food Service Industry
MARKET GROWTH

Existing Product New Product

Food Delivery Buy Now. Pay Later

NEW MARKET
DIVEST

New Market New Market

Tier 2 & 3 Cities Household Segment
FOOD DELIVERY 10 – Minute Delivery Existing Product New Product
Cloud Kitchens Grocery & Necessities
CASH COW DOGS
Cashflow Desired Movement

BUSINESS MODEL GROWTH AREAS SUGGESTIONS BLINK-IT DEAL FUTURE PROSPECTS 2

Exploring the Growth Areas for Zomato
KEY GROWTH AREAS MARKET TRENDS COMPETITORS

1) QUICK COMMERCE A major shift in

➢ Pandemic induced shift to consumer behavior
Online mode expected toward
E-Grocery Segment
➢ Groceries & FMCG form a
huge chunk of online orders BofA Global Research Report

2) B2B OFFERINGS Expected growth of

➢ Pandemic induced disruptions industry to be 135% in
in restaurant industry current FY, inching to
7-Year High
➢ Increased demand for asset-
light models [B2B services] NRAI Report

3) CLOUD KITCHENS
➢ High demand for low cost, high The cloud kitchen
return investments market is expected to
grow by 9% CAGR.
➢ Cloud kitchens are proliferating,
unexplored niche

BUSINESS MODEL GROWTH AREAS SUGGESTIONS BLINK-IT DEAL FUTURE PROSPECTS 3

 A Growing B2C Opportunity - Meal Kits and Tiffin Services
Zomato should capitalise on new trends to serve the evolving needs of Indian Consumers

Global Market Size of Meal Kits TIFFIN SERVICES

70

60

50
15.3% 2.5 million 90%
CAGR Daily demand for tiffin Unorganised players
$ billion

40 in the market
services in India
30

20 PROPOSED SOLUTIONS FOR ZOMATO

10

0 Offer healthy and affordable DIY Meal Kits

2022 2023 2024 2025 2026 2027 2028 2029 2030
to customers from 3rd party retailers

KEY DRIVERS

Change in Grocery shopping & Healthy and convenient List various tiffin providers on the app with
cooking habits due to Covid-19 meals at affordable prices weekly and monthly subscription choices

BUSINESS MODEL GROWTH AREAS SUGGESTIONS BLINK-IT DEAL FUTURE PROSPECTS 4

An Emerging B2B Opportunity - Zomato Analytics for Restaurants
Leveraging the company’s massive user data to produce actionable insights for clients

1. Geospatial 2. Profitability
Data Optimisation

In which exact Which dishes

location should a should the restraunt
fast food chain open keep stock of and
a new franchisee for which ones to
max traffic? discontinue?

3. CONSUMER PREFERENCES AND TRENDS

Which item is most searched for in any given locality and what would
people pay for it?

CLIENTS

BUSINESS MODEL GROWTH AREAS SUGGESTIONS BLINK-IT DEAL FUTURE PROSPECTS 5

 Zomato Kitchens: Data driven Super Cloud Kitchens
Diversifying the revenue sources to differentiate from the competition

Zomato Kitchen’s Case Setting up Zomato Kitchen Result

Population of Delhi : 3 Crores Identify most popular dishes in a
Area of Delhi: 1438 sq. km locality using analytics Shorter Delivery
Time
Population Density: 20862
North Campus, Delhi Population in target area: ~62,500
Area : 3km radius
Approach specialized brands for Higher Margins
Income Groups Low Income Middle Income High Income catering to this demand
in Target Area (15%) (60%) (25%)
Probability of
0% 40% 50% Efficiency due to
using Zomato
Specialization
Orders per day
from Target Area 22813 Use Analytics to onboard 4-8 brands
in 2000 sq ft area (approx.)
% of people ordering High Order Frequency
Food Items from Zomato
Total Consumers

Commission on sales and lease-based

Pizza 25% 5703
revenue model Increased Market
Burger 15% 3422 Coverage
Food delivery through Zomato’s
Momo 10% 2281 delivery agents

BUSINESS MODEL GROWTH AREAS SUGGESTIONS BLINK-IT DEAL FUTURE PROSPECTS 6

 Zomato’s Positioning in Tier 2 & 3 Cities
Adopt a 4-step comprehensive framework to unlock growth potential across new geographies

Food orders come from

40% Tier 2 and 3 cities 1. IDENTIFY 2. IMPLEMENT

Identifying key areas for Expansion based

on 3 parameters: Partnering with Restaurants with highest
turnover in regions shortlisted in Phase 1
IDENTIFY IMPLEMENT 1. Internet and Tech Penetration
2. Alternatives to Food Delivery B2B Services like Inventory management,
3. % of population eating Non Home Billing, Cloud Kitchens etc for outlets.
Cooked meals

3. INCENTIVIZE 4. SUPERVISE

Incentives for outlets through lower Periodic analysis of regions through metrics:
SUPERVISE INCENTIVIZE
commission and low-cost ads
1. % increase in partner turnovers
Incentivizing customers through Free 2. Growth of TAM in the regions
2x growth in Online service Transactors Delivery, Discount on Pro Membership 3. Analysis of Cuisines with high turnovers
3x growth in Hyperlocal users
3x growth in E-Commerce Users

BUSINESS MODEL GROWTH AREAS SUGGESTIONS BLINK-IT DEAL FUTURE PROSPECTS 7

Blinkit’s acquisition: New avenues for Zomato’s growth
“Quick commerce opens up a new market as the grocery market is much larger than the food delivery market”

1 2 3
Quick Commerce will grow in Both companies have similar Access to Blinkit’s dark
India at 200% CAGR - Redseer user personas stores and delivery agents

$5 bn

Urban High Tech Savvy

$0.3 bn
Residential Disposable & Access
Areas Income to Internet

2021 2025 “The probability of food delivery customers

being open to quick commerce is high”

Diversifying its revenue stream by Zomato can increase the customer wallet Newly launched ‘Zomato Instant’ promises
investing in a high growth sector, share spent on their platform and also food delivery within 10 minutes.
Zomato can compete with competitors drive higher frequency and engagement Delivery fleet integration will lower
like Swiggy Instamart with Blinkit delivery costs by 5-10% per order

BUSINESS MODEL GROWTH AREAS SUGGESTIONS BLINK-IT DEAL FUTURE PROSPECTS 8

 Exploring the future prospects for Zomato
Metrics India USA China
KEY DRIVERS OF GROWTH
2000
Population (bn) 1.36 0.33 1.43
1800 Internet Penetration (%) 43% 88% 63%
1600
1400 Restaurant food market (%) 10% 54% 58%
1200
1000
Online food delivery size ($ bn) 4.2 21 90
800
Online food delivery users(mn) 45-55 90-120 430-470
600
400 Users (% of internet penetration) 9% 36% 50%
200
0
Food consumption metrics across India, US &China, 2019 ~ RedSeer
2020 2021 2022 2023 2024 2025

Orders (mn) ATV (INR) GOV (INR bn) Drivers FY 20 FY 21 FY 22 FY 23E FY 24E FY 25E
Orders (mn) 403 239 535 909 1320 1850

Share of Online food delivery in Monthly ATV (INR) 278 397 398 385 380 380
60%
turnovers’ of restaurants vs ~35 % pre-covid GOV (INR bn) 112.2 94.8 213 290.5 369.9 497.2
Kotak Survey of 30 restaurants across 5 Indian Cities Food Delivery key metrics Forecast ~ Kotak Report, Annual Report

9% CAGR growth rate of Food Service 29%

CAGR growth rate of Food Delivery
55% Forecasted CAGR growth rate of
industry to reach $110 Billion by FY25 GMV to reach $39 Billion by FY30 Zomato’s Revenue up to FY25
ATV: Average Transaction Value GOV: Gross Order Value

BUSINESS MODEL GROWTH AREAS SUGGESTIONS BLINK-IT DEAL FUTURE PROSPECTS 9

Financial Projections for Zomato
Highlights Revenue Projections
4,50,000
4,00,000

4,15,748
58% Revenue Growth 5890 NOPAT in FY27
3,50,000
3,00,000
CAGR Mn
2,50,000
2,00,000
1,50,000
1,00,000
FY25 Break Even point 1.9% EBIT Margin in
FY27 50,000
0
2020 2021 2022 2023E 2024E 2025E 2026E 2027E

Profit and Revenue Relation EBIT Projections

15,000 10,000
7,925
10,000 5,000
5,000
0
0
2020 2021 2022 2023E 2024E 2025E 2026E 2027E
-5,000 -5,000
-10,000 -10,000
-15,000
-15,000
-20,000
-25,000 -20,000

-30,000 -25,000

BUSINESS MODEL GROWTH AREAS SUGGESTIONS BLINK-IT DEAL FUTURE PROSPECTS 10

THANK YOU

TEAM SHARKS
A K S H AT G U P TA
VEDANT SOMANI
AY U S H M A D H O G A R H I A
 Appendices – Risks involved

➢ Competition – Low Switching cost & Loyalty for

customers leads to a major threat of Competitors
High

➢ Regulatory Risks – Uncertainty regarding Labour laws

which might lead to increase in operational costs
Internet Competition
➢ Rising Fuel Costs – High Inflation coupled with
Penetration Regulatory
geopolitical issues, lead to rising fuel costs, thereby higher
Medium

Risks
IMPACT

variable cost

➢ Reputational Risk – Leak of fake/confidential information

regarding internal procedures might lead to backlash.
Reputational
RIsk ➢ Stakeholder Conflicts – Allegations for unfair trade
Rising Fuel practices, may lead to conflict with restaurant partners.
Low

Stakeholder Costs
Conflicts ➢ Internet Penetration – Slow growth of internet
penetration & E-Commerce may dampen development in
Low Medium High Tier 2 & 3 Cities
PROBABILITY
Appendices – Positioning in Grocery Segment
ZOMATO’S POSITIONING IN GROCERY SEGMENT

➢ Zomato should build its

grocery business closer to
middle of this framework.

➢ Leverage technology to design

and manage its dark stores so
as to offer 4-5K SKUs with 10-
60m delivery TAT [Turnaround
Time]
 Appendices – Income Statement Forecast
INCOME STATEMENT FORECAST

Particulars 2020 2021 2022 2023E 2024E 2025E 2026E 2027E

Revenues 26047.0 19938.0 41924.0 73530.5 119401.4 187719.5 284394.0 415748.2

Growth(%) 98.4 -23.5 110.3 75.4 62.4 57.2 51.5 46.2

Expense 49093.0 24610.0 55603.0 83412.5 124955.4 187697.5 283023.8 407523.9

EBITDA -23047.0 -4672.0 -13679.0 -9882.0 -5554.0 22.0 1370.2 8224.2

EBITDA Margin (%)* -88.5 -23.4 -33.5 -18.6 -7.6 0.0 0.5 2.0

Depreciation** 229.0 203.0 212.0 235.0 258.0 280.0 289.5 299.4

EBIT (excl. other income) -23276.0 -4875.0 -13891.0 -10117.0 -5812.0 -258.0 1080.7 7924.9

EBIT Margins -89.4 -24.4 -34.1 -19.0 -8.0 -0.3 0.4 1.9

Operating tax — 13.0 20.0 -2590.0 -1488.0 -67.0 277.4 2034.4

Tax rate (%) — -0.3 -0.1 25.6 25.6 26.0 25.7 25.7

NOPLAT -23276.0 -4888.0 -13911.0 -7527.0 -4325.0 -195.0 803.3 5890.5

 Appendices - Forecasts
SEGMENT-WISE REVENUE CONTRIBUTION

Revenue Contribution by each Segment (in %)

Segments 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
Food delivery (excl.deliverycharges) 71 75 80 79 79 78 77 77
Hyperpure— 4 10 8 10 12 14 16 16
Advertising+other services 25 15 12 11 9 8 7 7

REVENUE GROWTH ASSUMPTIONS

Segment Revenue Growth Rate Projection (in %)

Segments 2023E 2024E 2025E 2026E 2027E
Food delivery (excl.deliverycharges) 34.0 22.1 18.8 16.0 13.6
Hyperpure— 50.0 42.5 36.1 30.7 26.1
Advertising+other services 33.0 28.1 23.8 20.3 17.2

* EBITDA Margins for FY27 ~Kotak Bank’s initiation coverage report

Margins for the other have been estimated by team analysis
** Depreciation has been forecasted according to previous trend on polynomial trendline
Appendices - Forecasts
FOOD DELIVERY INDUSTRY FORECASTS

FOOD DELIVERY INDUSTRY GMV FORECASTS

Appendices – Food Delivery Overview
Appendices – Order Volume Overview
Appendices – Expansion across the Country
Appendices – Growth in Restaurant Partners
Appendices – Hyperpure Financial Overview